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CSWC 
Capital Southwest Corporation (CSWC)
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Upturn Advisory Summary
12/04/2025: CSWC (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
Number of Analysts
7 Analysts rated it
Limited analyst coverage, niche firm, research info may be scarce.
1 Year Target Price $23.58
1 Year Target Price $23.58
| 2 | Strong Buy |
| 1 | Buy |
| 4 | Hold |
| 0 | Sell |
| 0 | Strong Sell |
Analysis of Past Performance
Type Stock | Historic Profit 31.94% | Avg. Invested days 45 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating | Upturn Advisory Performance  4.0 | Stock Returns Performance  3.0 |
| Profits based on simulation | Last Close 12/04/2025 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 1.25B USD | Price to earnings Ratio 13.64 | 1Y Target Price 23.58 |
Price to earnings Ratio 13.64 | 1Y Target Price 23.58 | ||
Volume (30-day avg) 7 | Beta 0.81 | 52 Weeks Range 16.18 - 22.72 | Updated Date 12/4/2025 |
52 Weeks Range 16.18 - 22.72 | Updated Date 12/4/2025 | ||
Dividends yield (FY) 10.91% | Basic EPS (TTM) 1.6 |
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 39.79% | Operating Margin (TTM) 87.87% |
Management Effectiveness
Return on Assets (TTM) 6.45% | Return on Equity (TTM) 9.95% |
Valuation
Trailing PE 13.64 | Forward PE 10.07 | Enterprise Value 2206258944 | Price to Sales(TTM) 5.77 |
Enterprise Value 2206258944 | Price to Sales(TTM) 5.77 | ||
Enterprise Value to Revenue 17.12 | Enterprise Value to EBITDA - | Shares Outstanding 57466998 | Shares Floating 55772871 |
Shares Outstanding 57466998 | Shares Floating 55772871 | ||
Percent Insiders 3.95 | Percent Institutions 30.73 |
Upturn AI SWOT
Capital Southwest Corporation
Company Overview
History and Background
Capital Southwest Corporation, founded in 1961, is an internally managed Business Development Company (BDC) focused on providing debt and equity capital to middle market companies. Initially a venture capital firm, it has evolved into a lender and investor.
Core Business Areas
- Lower Middle Market Lending: Provides first lien, second lien, and unitranche debt financing to lower middle market companies.
- Equity Investments: Makes equity co-investments alongside debt investments in portfolio companies.
Leadership and Structure
Bowen Diehl serves as the President and CEO. Capital Southwest is internally managed, meaning its executives are employees of the BDC.
Top Products and Market Share
Key Offerings
- Debt Financing: Provides various debt financing options, including first lien, second lien, and unitranche debt, to lower middle market companies. Market share data is not readily available. Competitors include other BDCs and private credit funds.
- Equity Co-Investments: Makes equity co-investments alongside debt investments, aiming to generate capital gains. Market share data is not readily available. Competitors include private equity firms and venture capital firms.
Market Dynamics
Industry Overview
The BDC industry is highly competitive, with numerous firms vying to deploy capital into middle-market companies. Interest rate fluctuations and economic conditions significantly impact BDC performance.
Positioning
Capital Southwest focuses on the lower middle market, targeting companies often overlooked by larger lenders. Its internal management structure can provide cost efficiencies.
Total Addressable Market (TAM)
The US middle market lending TAM is estimated to be in the hundreds of billions of dollars. Capital Southwest holds a small, niche position with significant growth potential.
Upturn SWOT Analysis
Strengths
- Experienced management team
- Internal management structure
- Focus on lower middle market
- Strong track record of NAV growth
- Disciplined underwriting process
Weaknesses
- Reliance on middle market companies
- Sensitivity to interest rate changes
- Potential for credit losses
- Smaller asset base compared to larger BDCs
- Operational risk associated with internal management
Opportunities
- Increased demand for private credit
- Expansion into new industry verticals
- Strategic acquisitions
- Increased deal flow in lower middle market
- Growing its investment portfolio
Threats
- Economic downturn
- Increased competition from other BDCs
- Rising interest rates
- Regulatory changes
- Deterioration in credit quality of portfolio companies
Competitors and Market Share
Key Competitors
- ARCC
- TCRD
- MAIN
- GSBD
Competitive Landscape
Capital Southwest's internal management structure and focus on the lower middle market differentiate it, but it faces competition from larger BDCs with greater resources.
Growth Trajectory and Initiatives
Historical Growth: Historical growth has been driven by deploying capital into new investments and managing portfolio company performance.
Future Projections: Future growth projections depend on analyst estimates and company guidance, focusing on investment income growth and NAV appreciation.
Recent Initiatives: Recent initiatives might include new investment strategies, portfolio company acquisitions, or capital raising activities.
Summary
Capital Southwest is a BDC focused on the lower middle market. Its internal management structure provides cost efficiencies, but it faces risks associated with its target market and interest rate fluctuations. The company's performance is closely tied to the health of its portfolio companies and overall economic conditions. Recent performance has been strong, suggesting effective management and underwriting discipline.
Similar Stocks
Sources and Disclaimers
Data Sources:
- SEC Filings (10-K, 10-Q), Company Investor Relations, Analyst Reports, Market Data Providers
Disclaimers:
This analysis is for informational purposes only and should not be considered investment advice. Data is based on available information and may be subject to change. Investment decisions should be made in consultation with a qualified financial advisor.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Capital Southwest Corporation
Exchange NASDAQ | Headquaters Dallas, TX, United States | ||
IPO Launch date 1990-03-27 | President & CEO Mr. Michael Scott Sarner CPA, CPA | ||
Sector Financial Services | Industry Asset Management | Full time employees 30 | Website https://www.capitalsouthwest.com |
Full time employees 30 | Website https://www.capitalsouthwest.com | ||
Capital Southwest Corporation specializes in credit and private equity and venture capital investments in middle market companies, mezzanine, later stage, mature, late venture, emerging growth, buyouts, industry consolidation, recapitalizations and growth capital investments. The firm does not invest in startups, publicly traded companies, real estate developments, project finance opportunities, oil and gas exploration businesses, troubled companies, turnarounds, and companies in which significant senior management is departing. In lower middle market, the firm typically invests in growth financing, bolt-on acquisitions, new platform acquisitions, refinancing, dividend recapitalizations, sponsor-led buyouts, and management buyout situations. The investment structures are unitranche debt, subordinated debt, senior debt, first and second lien debt, and preferred and common equity. The firm makes equity co-investments alongside debt investments, up to 20 percent of total check and only makes non-control investments. The firm is industry agnostic, but it prefers to invest in industrial manufacturing and services, value-added distribution, healthcare products and services, business services, specialty chemicals, food and beverage, tech-enabled services and SaaS models. The firm seeks to invest in energy services and products, industrial technologies, and specialty chemicals and products. Within energy services and products, the firm seeks to invest in each segment of the industry, including upstream, midstream and downstream, excluding exploration and production, with a focus on differentiated products and services, equipment and tool rental, consumable products, and drilling and completion chemicals. Within industrial technologies, it seeks to invest in automation and process controls, handling and packaging equipment, industrial filtration and fluid handling, measurement, monitoring and testing, professional tools, and sensors and instrumentation. Within specialty chemicals and products, the firm seeks to invest in
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